More than 420,000 workers in five main industrial cities in Liaoning province were either laid off or resettled elsewhere last year after their original employers went bankrupt or were taken over by other companies.
Xinhua (the New China News Agency) reported last night that 133 enterprises in Shenyang, Dalian, Anshan, Fushun and Benxi were declared bankrupt and closed last year.
Another 80 unprofitable enterprises were taken over by other companies, the agency said.
As a result, 226,000 workers were made redundant and another 197,000 transferred to new companies with the Government's help, Xinhua said.
Traditionally a heavy industrial province, Liaoning is facing serious unemployment problems as many of its factories and mines are losing money.
The Xinhua report did not give details of the firms' losses, but said the province was able to reduce these by 2.2 billion yuan (HK$2 billion) last year through mergers, bankruptcies and public listings in stock markets.
The agency said Liaoning was encouraging its enterprises to pool their resources and establish enterprise groups to compete in the marketplace. So far, 32 enterprise groups have been formed in the province, ranging from chemical companies to steel manufacturing.
Meanwhile, the Government had been promoting reforms in small factories and 60 per cent of these small businesses had started to restructure their operations and experiment with new methods such as shareholdings to raise capital, Xinhua said.
Central leaders have said publicly the Government will not allow bankruptcy on a massive scale this year and only 30 billion yuan has been set aside for bankrupt companies.